erikrockefeller, it appears that you might not have requested the correct type of distribution from the traditional IRA. The money that was rolled over to the traditional IRA that was not eligible to have been rolled over constituted an excess contribution to the traditional IRA that needed to be removed by a return of contribution, not by a regular distribution. With a proper return of contribution, only any gains attributable to the distribution being returned would be taxable. Box 1 would show the amount returned plus gains and box 2a would show just the gains.
What is the code in box 7 of the Form 1099-R reporting the distribution from the traditional IRA?
Is the amount in box 2a different from the amount in box 1?
In what year was the rollover deposited into the traditional IRA?
